Campbell Soup 1Q Profit Down 8 Percent
Camden, NJ, United States (AHN) – Campbell Soup’s earnings for the first quarter of 2011 slid 8 percent but the company maintained its full fiscal year outlook.
Net income for the period ended Oct. 31 was $279 million, or 82 cents per share, down from $304 million, or 87 cents a share, in the previous year.
Revenues dropped 1 percent to $2.1 billion, including the effects of currency.
Soup sales in the United States declined 5 percent, with revenues from ready-to-serve soups plummeting 13 percent despite increased spending to promote the products. Sales for Campbell’s condensed soups were down 1 percent.
Beverage sales jumped 10 percent largely because of increased marketing and product launches under the V8 V-Fusion brand. The double-digit growth, however, was not enough to boost the soups, sauce and beverage segment, which delivered revenues of $1.1 billion, or 3 percent less than last year.
The segment performed well in the Asia Pacific and Europe, but posted weak sales in Latin America.
Baking and snacking was the only segment to post positive growth. It brought in $544 million in revenues, 3 percent higher than a year ago, with the strong performance of Pepperidge Farm products.
Campbell Soup, based in New Jersey, kept its previous forecast for the full year. It projected revenues would rise 1 to 3 percent while earnings per share would grow between 2 to 4 percent.
The 141-year-old company launched a $100 million ad campaign in September to boost sales of its soup brands. The nationwide, multi-media campaign sought to shift focus on the iconic Campbell Soup can to versatility of soups as a snack or ingredient.
“We intend to remain competitive in U.S. soup through the height of the soup season, and it’s likely that margin pressures will persist through the second quarter,” chief executive Douglas Conant said in a statement. “In the second half, we plan to place greater focus on advertising and brand-building initiatives in our marketing efforts.”
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